What is a 1031 exchange and under what circumstances may a seller benefit from one?
What is a 1031 exchange and under what circumstances may a seller benefit from one? | EquiTrust Title Company | Brian J. Ditthardt | http://www.equitrust-title.com/ | (850) 845-0233 | 42 Business Center Drive, #106, Miramar Beach, Florida 32550
Basically under Federal Law, a seller is able to defer any tax obligations that he or she may have on the gain of real estate that they're selling, and they have to exchange it for like kind qualified investment property. The prevailing idea is just you're exchanging one property for the next, and not having to pay taxes at that particular point in time. The seller's gonna have to hire a qualified intermediary, he's gonna have to have a CPA, they're gonna have to identify the replacement property within 45 days of closing, and then they have 180 days to actually close. Those are the basics of a 1031 exchange.